Navigating the Software Licensing Conundrum

 
 
By Michael Vizard  |  Posted 2016-08-12 Email
 
 
 
 
 
 
 
 
 
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    1 - Navigating the Software Licensing Conundrum
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    Navigating the Software Licensing Conundrum

    While software is crucial to the survival of most solution providers, there's a great deal of room for improvement in how software licenses are managed.
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    2 - State of Software Licensing
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    State of Software Licensing

    Almost three out of four (73%) producers claim their pricing and licensing policies are effective. Yet 51% of those surveyed admit they don't track customer use, and 45% don't audit customer use. Another 55% admit they don't have technology in place to track customer use, and 42% concede their customers have challenges determining which software products they're entitled to use.
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    3 - Importance of Software Licensing
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    Importance of Software Licensing

    A full 81% of enterprises said managing software licenses is important, with 74% citing the need to reduce software costs and 71% pointing to the need to comply with software licensing terms.
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    4 - Software Licensing Models in Flux
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    Software Licensing Models in Flux

    More than half of providers (56%) have changed their licensing and pricing models in the last six months. A total of 70% say they plan to make changes in the next two years. The top three reasons for change are to generate more revenue, respond to competitive dynamics and improve relations with customers.
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    5 - Sources of Licensing Revenue
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    Sources of Licensing Revenue

    Just over two-fifths (43%) report that perpetual licenses contribute half or more of their revenue. Many providers are moving toward consumption-based models (42%) and subscription/term licenses (30%).
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    6 - Reliance on Software Installed On-Premise
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    Reliance on Software Installed On-Premise

    More than a third (36%) say less than half their applications are delivered as traditional installed software.
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    7 - Preferred Licensing Models
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    Preferred Licensing Models

    Device-based (19%) and site-based models (17%) were cited most often, followed by named-user and token-based models, tied at 13% each. A full 78% of software providers say they don't use tokens. Another 63% don't use a named-user model, while 52% say they don't support a site model and 43% don't support a device model.
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    8 - Drivers of Software Licensing Changes
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    Drivers of Software Licensing Changes

    The rise of mobile computing (55%) was cited as a primary driver, followed by cloud computing (49%); virtualization (47%) and software-as-a-service (46%) technology.
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    9 - Method of Licensing Enforcement Today
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    Method of Licensing Enforcement Today

    Network licensing is most commonly used, at 36%, followed by serial numbers and node locks (tied at 29% each). Internet licensing was cited by 27%.
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    10 - Method of Licensing Enforcements Customers Prefer
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    Method of Licensing Enforcements Customers Prefer

    A full 81% of enterprises cited network licensing as their preferred method of software licensing, followed by product activation (69%) and trust-based licensing (44%). Less preferred are dongles (82%), serial numbers (62%) and automated monitoring (50%).
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    11 - Method of Licensing Enforcement Tomorrow
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    Method of Licensing Enforcement Tomorrow

    The biggest shift will be to Internet licensing, according to 36%, followed by network licensing (27%) and automated monitoring (16%).
 

Software is clearly at the crux of most of the business models solution providers across the channel rely on to sustain their companies. However, there's a lot of room for improvement in how software licenses are managed that would benefit vendors and their partners, suggests a new survey of 268 application providers and 221 enterprise IT customers conducted by Flexera, a provider of tools for managing software licenses. The survey finds that nearly three-fourths of software providers believe that their pricing and licensing policies are effective. Yet 51 percent also admit they don't track customer use, and 42 percent admit customers don't often know what software products they are licensed to use. For the channel partners of these providers, that would suggest a lot of potential software revenue isn't being recognized. Unfortunately, the survey also notes that software licensing models are in an extreme state of flux, which makes it even more difficult for solution providers to figure out exactly who might owe whom how much and when. Channel Insider examines key takeaways from the study.

 
 
 
 
 
 
 
 
 
 
 
 

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